The Trading Game

The Trading Game is a team building workshop that simulates the negotiating activities that may need to take place between different departments or organisations in the setting up of joint ventures.

You can download a FREE Powerpoint or PDF of this tool at the bottom of this page

Objectives

  • To develop collaborative problem solving tools.
  • To improve negotiating skills.
  • To recognize the need to take a long-term view of partnership relationships.

Why is it useful?

It develops realistic and co-operative approaches to partnership negotiations by:

  • experiencing the dynamics of multi-party negotiations and practice basic negotiating tactics
  • observing the impact that win-lose negotiations have on winning and losing teams
  • identifying the impact that win-lose negotiation teams have on the relationships between negotiating parties

What do you need?

Time required

You need at least 1 hour for the game and discussion.

Number of participants

The exercise can be run with between 8 and 30 people. 15 is ideal.

Space

  • You need a room large enough to accommodate up to six groups of four to six players each: leave plenty of space between the groups so they can work and walk around.
  • If the number of players is smaller than 30 e.g. 15-20, divide up the players in similar proportions to those given on the next page. There should always be at least five different groups and at least one group should have a Grade A resource set. If you remove a Grade A resource set make sure you remove a corresponding amount of paper, so there is a good balance between ‘technology’ and ‘raw material’.
  • Each of the 6 groups need a table or desk as a work surface and a chair or two for each group would be useful.
  • The organizers need a table or desk, and a blackboard or uncluttered wall surface for sticking up posters.
  • The organizer should have some extra pencils and paper for emergencies. The paper can be the same as the original 30 sheets or of a different color for a ‘discovery of a new resource’ situation. It also is handy to have paper to use for passing messages.

Equipment

For 30 players you will require:

  • 30 A4 sheets of paper – plain and all the same color
  • 30 ‘pound notes’ of £100 each
  • 2 ‘post-it’ pads
  • 4 pairs of scissors
  • 4 rulers
  • 2 compasses (for drawing circles)
  • 2 set squares
  • 2 protractors
  • 14 lead pencils
  • 2 charts

Resource sets

Group A: 2 scissors, 2 rulers, 1 compass, 1 set square, 1 protractor, 1 sheet of paper, £600, 4 pencils

Group B: 10 sheets of paper, £200, 1 post-it pad

Group C: 4 sheets of paper, £200, 2 lead pencils

NB: Do not point out to the groups that they are receiving different sets of materials – they will notice soon enough

Game Objective (for the participants)

The objective of each group is to make as much money for itself as possible by using the materials given to it.

No other materials can be used. Money is made by manufacturing paper shapes.

The goods you are going to manufacture are the shapes shown on the Diagram of Shapes.

Each shape has its own value as shown on the Diagram and these are given to the banker in batches of five similar shapes for checking and crediting to your bank account.

You can manufacture as many shapes as you like – the more you make the wealthier you will be.

The Rules (for the participants)

There are just four simple rules:

  1. All the shapes need to be cut with clean sharp edges using scissors and must be of the exact size shown – the shapes are taken to the banker for your account.
  2. You can only use the materials that have been given out.
  3. There is to be no physical force used during the game.
  4. The leader represents the United Nations and will intervene in any disagreements.

The Diagram of Shapes

The Trading Game - Diagram of Shapes

Process

  1. All the players need to be able to see the Diagram of Shapes shown on page 6 during the game, so this needs to be copied on to a blackboard or made into a poster for display: depending on the shape of your room you may need two posters.
  2. The furniture of the room needs to be arranged so that there are six areas for the groups to work from: each area should have a flat working surface.
  3. You need two organizers / facilitators per game: one to act as a banker and one to act as leader. The leader’s role is to keep control of the entire game, taking note of how it develops and occasionally changing the game’s direction by introducing new elements into it. Leaders must be ready to lead the discussion at the end of the game. For this it is useful to jot down anything interesting or significant that the players have said or done during the game.
  4. The banker requires a pen and a sheet of paper with six columns – one for each of the six groups.
  5. With the Diagram of Shapes in position, the equipment arranged in sets, the banker’s sheet prepared and the furniture re-arranged you are now ready to play the game.
  6. Split the players into five or six groups as shown, allocate each group an area in the room or hall and then give each group a set of materials as indicated.
  7. Now read out the objective and rules of the game to the players.
  8. The manufacturing and trading should continue for about 30-45 minutes depending on the size and interest of the group.
  9. When you call time to stop manufacturing let the dust settle and host a plenary discussion whilst the banker counts the final scores.

Plenary questions you could ask:

  • How did that go for you?
  • What did you find the most challenging?
  • Were there any emotional responses in the room (yours or otherwise) that surprised you?
  • What strategy brought you the most success and why?
  • What would you do differently if you had your time again?
  • What does your experience tell you about relationship building?

Managing the Game

Watch what is happening

The Grade A groups will begin making shapes as soon as they have all the materials and equipment, but they will soon run short of raw materials and probably try to buy some paper from other groups. At first the groups with paper will probably sell it for a very low price: note how the ‘terms of trade’ change during the game and point this out later. You will be the only person who can see how the game is developing as a whole: the players will be engrossed in their own group so it is important for you to note the types of alliances and deals which develop and bring these into the discussion at the end.

Simulate activity

Some groups will feel impotent and neglected. In order to encourage trading activity, the leader may have to feed in more information and create new situations which have parallels in the real world. Some suggestions are made below in ‘Possible simulations’. Some of these changes will apply to all the groups, but others will be communicated by secret messages given to particular groups only by the leader.

Changing market values

After a while, change the value of some of the shapes, so that, for example, rich groups find that their compasses are no longer as useful as they were for making valuable shapes. Remember to tell the banker of any price changes.

The supply of raw materials

For your own secret supply of extra paper you can ‘feed’ an extra supply to one of the groups and announce to the world (i.e. all the groups) that a new deposit of raw material has been discovered in this group. If this is done late in the game when everyone is running short of paper, it will quickly change relationships between the groups. You could also add a few pieces of different coloured paper: this could be used to represent the discovery of a new low-grade or high-grade resource and the shapes from this paper could be valued accordingly.

Using the Post-Its

Two groups will have a pad of post-its. They are not told anything about it and may not even notice that they have them: its real life parallel is a resource of which a country does not know the true value. You can give them a value secretly telling two other groups (by discreet written messages) that if they attach one post-it to their products they will be worth four times the original value. (Tell the banker). These groups will then start to search for the post-its. As the holders don’t know its value they may well sell it cheaply and the first group will make a profit. Alternatively, they might hold on to their resource until the end of the game and never let it be used, in which case its potential is never realised.

Aid

During the game you could encourage one or two groups by granting them UN aid on certain conditions: e.g. that a third of the goods produced with the aid should be paid back to the UN as interest. The aid could be given in the form of technology (e.g. extra scissors to one group for a short term only). Look out for examples of richer groups offering aid to poorer groups: what were the terms of the deal? In fact, this is unlikely to happen unless the leader encourages it. Groups tend to be very reluctant to help others!

Possible simulations

Trade Associations

Trade Associations may develop during the game: two or more groups may agree to co-operate for their mutual benefit. Notice the degree of co-operation that takes place between countries. Is it full union, or sharing of technology or materials, or joint marketing?

Colonisation and Annexation

A powerful group offers ‘protection’ to another group or offers to absorb it, promising that its rights and assets will be respected.

Tariffs and Duties

Some groups may place restrictions or charges on trading with other groups.

Producer Cartels

The groups with the most paper might decide to join together to protect themselves from being individually exploited by Grade A countries.

Trade Embargoes

Groups with large supplies of paper could stop trading or reduce their amount of trade. By withholding supplies of paper, they may be able to improve the terms of trade for themselves and conserve stocks for the future. However, this would be risky without the protection of a cartel.

Strife and Unrest

The game leader can halt production by declaring a temporary general strike. He should remove the scissors from Grade A group for a few minutes so that production has to stop.

Developments

These developments will probably not happen unless the leader introduces them. It is not necessary to try all 6 within the game, but they are all situations which might well develop and they will provoke discussion at the end of the game. One of the advantages of this game is that it is very open-ended: all kinds of alliances will emerge and then can be broken and inevitably one of the players will ask whether s/he can ‘cheat’.

Secret Sauce

  • At the beginning of the game some confused or puzzled players will bombard you with questions. Can we borrow scissors? Where can I get scissors? Can we trade? Why haven’t we got scissors (paper etc)? What are the ‘post-its’ for?
  • Resist all temptation to answer these questions. Just repeat the rules or stay silent!
  • After a difficult minute or two of confusion at the beginning, players will start moving around the room and begin trading: the initiative should come from them, not you.
  • Leave as much time as possible for the plenary discussion. This can be an emotional session so you need to leave plenty of time for people to vent and calm down before moving on.
  • As organizer it’s important you appear fair and don’t favor certain groups.
  • Try to give each group ‘their moment’ in the game when they’re seen as important by the other teams. Use ideas in the ‘Managing the Game’ section and ‘Possible simulations’ to create different game dynamics.

Free Download Files

About the Author

Nick Martin has more than 15 years experience as a change manager and is the founder and CEO of WorkshopBank.

Leave a Reply 5 comments

Erin Reply

I would like to try this in my classroom. Have you considered a way to introduce the idea of trends/fads to the game? If you have an idea, please let me know. Thanks.

    Nick Martin Reply

    I think it’s possible to introduce any live simulations to this game Erin. Let your creativity get the best of you and see where it goes. I’m sure your participants will love it.

Deepali Reply

Wow very intensive tool. I am going to use it with Graduate Engineers in IT organisation.
Will keep you posted with the outcomes and overall ease of the tool.

MIwida M Guevara Reply

Thank you for sharing your ideas. We run workshops for parents, school principals, Mayors, Governors, and CSOs so that they can work together to provide children with equal access to a good education. We build their capacities to work as a team, do project planning, and monitor results. I found your activities very useful and interesting. Thank you again.

Anukulya Reply

Dear Nick,
Thank you so much for creating and sharing such effective training tools. I conduct some activities similar to trading game but yours is very refined. In fact most of the tools and activities in your website are really creative and effective. We really need more people like you in the training fraternity. Looking forward to more creative content in your website.

Leave a Reply: